As the stock market’s health plunged in February due to fears of the coronavirus, real estate received a shot in the arm, according to the Denver Metro Association of Realtors’ (DMAR) most recent report.
“While the stock market struggled with fears of the spreading coronavirus, real estate stayed strong,” noted Jill Schafer, chair of the DMAR Market Trends Committee, in the group’s report of February home sales statistics. That’s due, in part, to the fact that “…some people who are heavily invested in the stock market are shifting funds into real estate, considering it a more stable investment, especially with interest rates at near records.”
In Denver, tight inventory also remains key to the overall picture. Active residential listings dropped 2.15 % in February from January. The total number of listings was a scant 4,835, compared to the month’s historical average of 13,780.
The dearth of listings is making sellers happy, as average prices rose in February (3.16% from January) to $487,009, and homes sold 15.22% quicker, taking 39 days rather than last month’s 45.
Sellers are also benefiting from near record-low mortgage rates, which are incentivizing buyers to start their home searches.
The coronavirus, however, may impact sales down the road, as buyers become wary of state of the economy overall. “Buyers must juggle the desire to take advantage of improved affordability with the possibility that a slowdown that could push down home prices or even push them out of a job. And in the short-term, there is the prospect of quarantines and other restrictions on movement if the virus spreads,” Ali Wolf, director of economic research at Meyers Research, told the Denver Post.
“If consumers can look past the uncertainty, the entry-level market will benefit the most from this trend as the monthly payment is of critical importance to this group,” he added.
At least for now, sellers are back in the driver’s seat in every price level, notes the DMAR report, except for homes costing above $1 million. These homes “had higher months of inventory (in February), indicating buyers may have a little more power in negotiations on high-end homes in some areas,” wrote Schafer.
“What’s ahead?,” she concluded. “Will we see the spreading coronavirus impact real estate in Denver? …Will the approaching presidential election cause changes in our market? Both will likely have some effect, but it’s hard to tell if it will be a small ripple or a big wave.”